Cleantech's Quiet Vindication

Written By Nick Hodge

Posted May 3, 2011

Still belittled by the bullies of Internet forums and politicians with other, shall we say, allegiances, renewable energy has yet to be fully appreciated in the United States.

I needed only look at the first page of the comments we get on this website to find the epitome of this sentiment:

Solar power generators will never return the energy that goes into manufacturing and constructing them. It is a con. EAC Reader

The comment was in response to Google’s (NASDAQ: GOOG) $168 million investment in BrightSource Energy’s 392 MW solar installation in the Mojave Desert. It’s the same project in which NRG Energy (NYSE: NRG) invested $300 million last year.

So, thanks for your comment, EAC Reader…

But given Google’s $174 billion market cap, 400% share price appreciation since IPO, utter dominance of the search and online ad market, and NRG’s status as a stalwart utility with 13,820 MW under management in three countries…

I’m going to go ahead and say they did a robust evaluation of energy returned on energy invested (EROI), as well as a thorough calculation of capital and tax expenses and returns.

Comments like those — and the camp of people who ascribe to them — are the energy industry’s equivalent of the “birther” movement.

On a national level, these Trump-esque comments are keeping us from an honest discussion of real energy issues.

I suspect they’re keeping more than a few naïve investors from making smart investment decisions as well.

Open Secrets

Every now and then, something is so obvious that it’s anticlimactic when confirmed.

Mobile devices are tracking us. Shocker.

Osama was in Pakistan. Who knew?

Similarly, the rise of cleantech is an open secret.

Just as we publicly play nice with Pakistan while executing covert military actions inside its borders, dominant energy industries have publicly disputed cleantech’s viability and necessity while simultaneously trying to get a piece of its future profits.

As with most open secrets, the evidence is ample. One need only look at Exxon’s association with anti-climate change and renewable research through donations and partnerships with groups like the Cato Institute and the Institute for Energy Research at the same it’s investing heavily in biofuels research.

The mission of those mentioned groups is clear: To further the business agenda of fossil fuels.

And the business agenda is also clear: Leach every last dollar from a fossil fuel industry in terminal decline, while publicly decrying cleantech’s viability so they have enough time to invest in that, too.

The most expensive sunglasses in the world shouldn’t shade you from this hypocrisy.

Future So Bright

I mentioned over the weekend and Jeff elaborated yesterday on Total’s (NYSE: TOT) $1.38 billion investment to acquire 60% of SunPower’s (NASDAQ: SPWRA) shares.

This was the largest investment in a solar company by an independent oil company to date. What’s more, Total paid a 44% premium for its shares of SunPower — $23.25 per share versus the prior day’s closing price of $16.22.

The significance of this event should not go unnoticed. It means:

  1. Major oil companies are ready to invest in renewable in a big way;

  2. They’re willing to pay a premium to get into the market.


Unless you’re like that EAC reader above — whose ideological and political preferences have clouded his judgment so much, he believes the world’s biggest companies are investing in a fruitless technology — you should be interested in getting into this market as well.

I’ll turn once again to two of my favorite charts. And I challenge anyone to find an industry with a more prosperous outlook:

Global Installed Solar Capacity 2000-2020

That’s 393% forecast growth for solar installations.

Global Installed Wind Capacity 2000-2020

And 217% forecast growth for wind installations…

This at a time when the global consensus seems to be oil reserves are a finite and declining resource.

Rest assured, the incumbent energy establishment does itself no favors by talking up the credentials of renewable energy. It knows renewable energy is the way of the future, but it also knows maximum profits can only be had by using fossil fuels as long as possible.

Sooner or later, they’re going to have to make a play for the future. Total tipped off the game last week.

It was no secret Osama was in Pakistan. It was no secret Apple and Google were tracking users.

It’s no secret that oil companies will invest billions in clean energy companies…

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Call it like you see it,

Nick Hodge

Nick Hodge
Editor, Energy and Capital

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